Should MLSs Be Required to Have a Waiver Policy?

A long-simmering proposal colloquially known as “MLS of Choice” moved forward today as an official recommendation to the Board of Directors from the 2017 Multiple Listing Issues & Policies Committee.

The recommendation put forward by the committee would require that MLSs allow agents to choose which MLS(s) they want to subscribe to. Also referred to as the “Mandatory Waiver Policy,” and first discussed at the 2017 Legislative Meetings & Trade Expo in Washington, D.C., the change would affect MLS Policy Statements 7.42 and 7.43.

In many markets today, MLSs use a jurisdictional assessment option, which means they can assess fees on multiple offices and licensees even though a different MLS may better serve their needs. The proposed change would mean MLSs could only assess fees based on the licensees who actually use the MLSs’ services. Agents who don’t wish to subscribe must provide proof of subscription at another MLS and sign a certificate of nonuse pledging not to access the MLS service they are opting out of.

The draft recommendation was offered Saturday during a joint meeting of the 2017 Multiple Listing Issues and Policies Committee & the Multiple Listing Services Forum. Committee member Sam DeBord, managing broker for Seattle Homes Group and vice president of strategic growth for Coldwell Banker Danforth in Bellevue, Wash., presented the proposal. “We think this is going to be better for the marketplace as a whole,” he said, noting that the intention of the recommendation was to both circumvent off-MLS listing activity and to support brokers and agents who want to expand but don’t do so due to the constraints of the so-called overlapping market syndrome. “These are brokers and agents who want to be members of more MLSs.”

During the forum, the committee heard from several attendees in markets where agents already have the ability to opt out when they work in areas served by multiple MLSs. “We’ve offered this waiver for 20 years,” Steve Byrd, CTO at Carolina Multiple Listing Services, Inc. told the committee. “It’s really not that big of a deal.”

Those from smaller MLSs objected to that characterization, saying that while larger MLSs can more easily track who’s using their services, implementing this new rule (and assessing fees upon those who violate it) would be too costly and difficult where staffing and budgets are lower. Even some who were not opposed to the change brought up concerns about the resources and time that it would take MLSs to implement these changes. “It is more work; we don’t deny that,” DeBord said. “But our thrust here was looking at the broker value.”

Emerging Issues & Technology Chair Rick Harris acknowledged that teams might try to divide up their MLS subscriptions between several members to save money. “There are some teams out there that will do that,” he said. But Harris added that it would violate the waiver terms if the team leader tried to take credit for the sale that happened on an MLS they are not a member of. “That team leader cares much more about the volume reporting, which is the perfect way for [MLSs] to prove that they’re using [MLS] services. They’re looking at being a leader in the market, not at a cost saving.”

Jim Abele, CEO of the Cincinnati Area Board of REALTORS®, proposed an amendment to the recommendation that would extend the implementation period from March 1 to July 1 of next year. Kenneth Walker of RE/MAX Paradigm Realty Group in Fair Haven, N.J. called for the extension to go to Jan. 1, 2019, because “most MLSs have already created budgets for 2018.” Both proposals ultimately failed to pass, however, as the majority of committee members felt the increased requirements of MLSs didn’t outweigh the needs of brokers.

“Brokers’ budgets happen today, and it’s going to cost them money,” DeBord said. “We’ve vetted this for over a year.”

Another amendment came from Cathy Libby, CEO of Maine Listings, based in South Portland, Maine. She was concerned that the waiver language requiring those who opt out of an MLS to agree not to use “MLS services” was not specific enough to cover MLS data. But attempts to add both “data” and “subscriber-only content” to the language both failed as they were determined to be unnecessary to protect the listing service providers.

After the Mandatory Waiver Policy motion passed on a voice vote, Abele attempted to add an additional recommendation that the National Association of REALTORS® “conduct an evaluation and addition of searchable NRDS data fields to track multiple MLS memberships of individual members.” The thinking behind this was that it would help REALTOR®-owned MLSs be better able to determine which members are subscribed to which MLSs. Though the motion failed, NAR staff executive Rodney Gansho sought to assure MLSs that the association would “look at what we can do to help MLSs with this implementation.”

Carl DeMusz, CEO of the Northern Ohio Regional MLS in Cleveland, Ohio, acknowledged that the implementation will be difficult for many of his colleagues, but urged MLSs to look at the situation from the brokers’ point of view. “I have a heart for the small ones, but we become smaller when we don’t take the risk to support our brokers,” he said. “Let’s show them that we can do the right thing… Maybe then they won’t come up with alternatives.”